LONDON, March 11 (Reuters Breakingviews) – The artificial intelligence boom would make for a nasty bust. Alphabet (GOOGL.O), opens new tab, Amazon.com (AMZN.O), opens new tab, Meta Platforms (META.O), opens new tab, and Microsoft (MSFT.O), opens new tab plan to spend
The scale is staggering. Big Tech’s spending commitments are roughly equivalent to 2% of U.S. GDP last year. Morgan Stanley foresees $2.9 trillion of global data-centre investment between 2025 and 2028, of which it expects roughly $900 billion will come from private credit and asset-backed lending. The boom now stretches far beyond Silicon Valley into lenders, utilities and infrastructure investors.
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OpenAI’s ambitions underscore the sheer scale of the financial mobilization. CEO Sam Altman has floated infrastructure build-out deals worth $1.4 trillion, requiring 30 gigawatts of power, enough to supply 20 million U.S. households. Headline figures probably overstate the immediate outlay, given the company’s complex web of overlapping deals and multi-year partnerships. Still, this is a massive amount of capital due to flow into cloud providers like Oracle (ORCL.N), opens new tab, Microsoft, Amazon, and CoreWeave (CRWV.O), opens new tab, as well as chip and gear-makers including Nvidia (NVDA.O), opens new tab and Broadcom (AVGO.O), opens new tab.
Funding all of this will be an increasingly difficult challenge. HSBC estimates that OpenAI may need $207 billion in additional financing by 2030. True, the company just announced a $110 billion funding round. But such sums increasingly bear asterisks.
Take Amazon. It pledged $50 billion of the round, but this begins with an initial payment of about $15 billion, with further outlays tied to Altman successfully leading his company onto public markets or surpassing a smarter-than-human technological milestone known as “artificial general intelligence
What happens if OpenAI or Anthropic fail?
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